I have an iPhone 4 of a friend of mine which has his baseband unlocked at 1.59.00. As he wanted to upgrade to 6.1.3, I tried doing so by using Sn0wbreeze in Simple mode to make the IPSW-file. Trying to restore with that one obviously failed with error 3194, since Apple isn't signing it any longer.

After this, I tried stitching the 6.1.3 SHSH blobs to it using Redsn0w, and this allowed me to start the restore in iTunes v10.7. The only problem I have now is that I keep getting the -1 error while restoring (iPhone did start with the Sn0wbreeze logo).

Is there any way I can fix this? If not, could I upgrade to iOS7 and keep using the phone as a rather expensive iPod touch?

Try booting the phone using redsn0w's "Recovery Fix" (Extras -> Recovery Fix). This should also boot the device tethered and allow you into Cydia. In Cydia, make sure you install the free "p0sixspwn" package (note the zero instead of an o) for an untethered jailbreak, then install ultrasn0w and go from there.

I have an iPhone 4 of a friend of mine which has his baseband unlocked at 1.59.00. As he wanted to upgrade to 6.1.3, I tried doing so by using Sn0wbreeze in Simple mode to make the IPSW-file. Trying to restore with that one obviously failed with error 3194, since Apple isn't signing it any longer.

After this, I tried stitching the 6.1.3 SHSH blobs to it using Redsn0w, and this allowed me to start the restore in iTunes v10.7. The only problem I have now is that I keep getting the -1 error while restoring (iPhone did start with the Sn0wbreeze logo).

Is there any way I can fix this? If not, could I upgrade to iOS7 and keep using the phone as a rather expensive iPod touch?

Thanks,
DebboR

I suggest you restore to 7.0.4 and request IMEI unlock from the official carrier.